Good govern­ment reigns in the trea­surer’s of­fice

The Saline Courier - - OPINION -

Today, I am go­ing to ask my read­ers to al­low me to have a point of per­sonal priv­i­lege re­gard­ing a good govern­ment ef­fort that has been com­pleted.

Please un­der­stand that I was in­volved in the be­gin­ning of this and there is some per­sonal pride in its com­ple­tion.

A lit­tle his­tory is nec­es­sary to un­der­stand how the dark­est hours in the his­tory of the Arkansas Trea­surer’s Of­fice came to bring about this piece of good govern­ment.

Martha Shoffner, a Demo­crat who served as a lack­lus­ter leg­is­la­tor un­til she be­came term lim­ited, was elected Trea­surer in 2006. She was re-elected to a sec­ond four-year term be­fore her trou­bles sur­faced.

There are seven statewide of­fices created by the Arkansas Con­sti­tu­tional of­fice. They are gover­nor, lieu­tenant gover­nor, at­tor­ney gen­eral, sec­re­tary of state, trea­surer, au­di­tor and land com­mis­sioner.

The Lit­tle Rock news me­dia gen­er­ally fo­cuses its at­ten­tion on gover­nor, lieu­tenant gover­nor, at­tor­ney gen­eral, and sec­re­tary of state. The me­dia gen­er­ally ig­nores what hap­pens in the other of­fices.

On May 18, 2013, the FBI ar­rested Shoffner. She was in­dicted by a fed­eral grand jury, con­victed and sent to fed­eral prison for tak­ing bribes in ex­change for giv­ing state busi­ness to those who should never have been al­lowed to do busi­ness with the state.

Sa­line County’s own Den­nis Milligan, then the Sa­line County Cir­cuit Clerk, ran and was elected as Trea­surer. I worked on his cam­paign and was his chief of staff in that of­fice.

Milligan, the first Repub­li­can Trea­surer since Re­con­struc­tion, ad­vanced some ideas on good govern­ment that were un­heard of in this state.

Rather than al­low the Trea­surer to do busi­ness with any­body he or she wanted — say peo­ple who gave money to a suc­cess­ful can­di­date’s cam­paign — one of his ideas was to in­sti­tute a “blind bid­der” sys­tem.

In this state, the trea­surer han­dles the money that comes in from var­i­ous taxes. He must have what is needed to pay the state’s bills ev­ery day.

While wait­ing on that money to be needed to pay state bills, those funds are in­vested to earn in­ter­est. I’ve heard Milligan say count­less times that ev­ery dol­lar he earns the state in in­ter­est is an­other dol­lar that doesn’t have to come out of tax­pay­ers’ pock­ets.

Milligan re­cently an­nounced the blind bid­der pro­gram is run­ning and in the first eight months, it had earned the state an ad­di­tional $845,000 in in­ter­est. Re­mem­ber I men­tioned the Lit­tle Rock me­dia doesn’t care what hap­pens in the three less-sexy con­sti­tu­tional of­fices? The Arkansas Demo­crat-gazette de­voted a whop­ping three para­graphs to this good govern­ment story.

The blind bid­der pro­gram is of­fi­cially called the Arkansas Trans­par­ent Treasury Auc­tion (ATTA). IT makes sure there is fair­ness when state banks want to hold cer­tifi­cates of de­posit of state funds.

“Pre­vi­ously, we had to call through lists of banks when we had CDS to place and the process could take up to a full days’ worth of work for our in­vest­ment team. Us­ing the auc­tion plat­form, we’ve re­duced the amount of time it takes to roughly 30 min­utes from start to fin­ish,” Milligan said.

When banks want to com­pete for state busi­ness on CD’S, the fi­nan­cial in­sti­tu­tion has to be cer­ti­fied be­ing on a sound fi­nan­cial foot­ing.

The bid­ding process is avail­able for view­ing on the In­ter­net by the pub­lic. Think of it as like Ebay where an item is up for auc­tion and bid­ders sub­mit bids un­til the time for bid­ding runs out.

It this case, the banks bid­ding for state busi­ness are as­signed a com­puter gen­er­ated num­ber when sub­mit­ting a bid. The pub­lic can see what in­ter­est rate a bid­der is of­fer­ing, but the pub­lic and trea­surer’s of­fice em­ploy­ees don’t know the iden­tity of the bank.

Like on ebay, when bid­ding ends, the bid­der with the high­est rate of re­turn sells the state the CDS. Only af­ter the best bid is ac­cepted does the com­puter re­veal the name of the bank mak­ing the win­ning bid.

Banks re­ceive e-mail no­ti­fi­ca­tion of auc­tion. They can de­cide if they want to par­tic­i­pate in try­ing to get this state busi­ness.

“Be­fore the cre­ation of the ATTA pro­gram, the State Treasury was get­ting a rate of re­turn of be­tween 0.85 to 1.10 per­cent from banks who pur­chased CDS,” Milligan said. “Since the auc­tion pro­gram be­gan, the high­est re­turn we’ve seen with this new pro­gram is 2.93 per­cent, and the low­est was 1.74 per­cent. That is a sig­nif­i­cantly higher re­turn than what we were pre­vi­ously get­ting.”

While CDS are not con­sid­ered one of the bet­ter ways to in­vest money, state law re­quires a cer­tain per­cent­age of state funds be in­vested in CDS.

Good govern­ment reigns in the trea­surer’s of­fice. I’m tak­ing a mo­ment of per­sonal priv­i­lege to ex­press pride in a suc­cess I was in­volved in be­fore my re­tire­ment.

JIM HAR­RIS Con­ser­va­tive Cor­ner

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